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James Hyerczyk

Dow Jones Industrial Average futures are trading nearly flat as we approach the cash market close after clawing back a huge loss from earlier in the session. The price action suggests that despite all the negative news driving prices lower throughout the week, investors have found value.

Traders said a bounce in the Chinese Yuan back over 7 to 7.06 per dollar helped ease concerns over a stock market meltdown after global yields collapsed and gold soared.

At 19:25 GMT, September E-mini Dow Jones Industrial Average futures are trading 25949, up 25 or +0.09%.

Daily September E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum may have shifted to the upside with the formation of a closing price reversal bottom at 25032 on August 6 and it subsequent confirmation on Wednesday.

The market isn’t close to changing the main trend to up, but there is room for a normal 50% to 61.8% retracement of the recent sell-off.

A trade through 25032 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 24626 to 27397. Its retracement zone at 26012 to 25685 is controlling the direction of the September E-mini Dow Jones Industrial Average.

The minor range is 27397 to 25032. Its retracement zone at 26215 to 26494 is the next upside target.

Late in the session, the September E-mini Dow Jones Industrial Average futures contract is trading 25949. The direction of the Dow into the close will be determined by trader reaction to the main 50% level at 26012.

Overtaking 26012 with conviction could create the momentum needed to drive the Dow into 26215 to 26494.

If sellers come in to defend 26012 then there could be a late session break into the main Fibonacci level at 25685.

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